Reuters File Photo: October 18, 2018 Passengers enter work in the financial district of Dublin, Ireland.
By Padraic Halpin and Conor Humphries
DUBLIN (Reuters) – Ireland on Thursday withdrew its opposition to the restructuring of global corporate tax rules, agreeing to drop a valuable 12.5% tax rate for large multinationals to boost efforts to impose a global minimum rate.
Ireland, Apple (NASDAQ 🙂 Google (NASDAQ 🙂 and Facebook (NASDAQ 🙂 for blue-chip companies at low tax European headquarters, in July refused to sign a preliminary agreement, objecting to the proposed rate of “at least” 15%.
An updated text this week dropped “at least” from that reference, clearing the way for ministers to say the way successive governments said they would never think – leaving low rates that have helped win Irish investment and jobs for decades.
“Joining this agreement is an important decision for the next step in Ireland’s industrial policy – a decision that will ensure that Ireland is part of the solution,” Finance Minister Pascal Donoho told a news conference.
“It’s a difficult and complicated decision but I believe it’s right.”
A handful of 1,140 countries signed the July agreement brokered by the Organization for Economic Co-operation and Development (OECD), marking the first rewriting of international tax rules in a generation.
Holdouts including EU member states Estonia and Hungary cannot block the proposed changes.
If Ireland maintains its low tax rate, multinationals that book profits there may be forced to pay additional taxes elsewhere under the proposals.
The government said it had received assurances from the European Commission that Ireland could maintain a 12.5% rate for firms with annual transactions below 750 million euros ($ 867 million). It can also keep tax incentives for research and development.
(1 = 0.8649 euros)
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